Dear Parliamentarians, Ambassadors,
Welcome to this year’s first meeting of the OECD’s Global Parliamentary Network (GPN). I am delighted that so many have joined us for this important discussion. Our substantive dialogue with MPs is indispensable in our collective efforts to build back better from this crisis.
The COVID-19 pandemic has had a devastating social and economic toll, claiming over 2 million lives to date, and reversing almost all of the economic progress made since the 2008 crisis. Today, more than 45 million workers are unemployed across the OECD. Throughout 2020, over 90% of students were affected by school closures, losing months of education and potentially jeopardising their future opportunities.
In our December Economic Outlook, we projected the global economy to average around 4% per annum over 2021-2022, although this will still leave output in many countries around 5% below pre-crisis expectations in 2022.
The recent resurgence of COVID-19 infections seen in many countries and the re-imposition of containment measures are affecting the recovery. The aggregate economic impact of these restrictions appears lower than during the first wave, but once again, service activities with high levels of social interactions are being hard hit.
We must focus on the recovery while combatting the virus. Governments should continue to implement effective sanitary measures and roll out vaccination programmes, while strengthening support for individuals, families and companies that remain deeply affected.
The encouraging news about vaccine deployment provides some optimism for an eventual path out of the crisis. However, for any progress to be made, countries must work together. The pandemic has transcended borders. Different countries and regions have faced it on an unequal footing, but if we do not recover together then we will all suffer.
The global economy stands to lose 9.2 USD trillion if governments fail to ensure developing economies’ access to vaccines. As much as half of this loss is expected to fall on advanced economies. That is why strong multilateral action that matches the ambition and execution of national responses is needed more than ever.
Today, we will discuss how governments can work together to ensure widespread production and distribution of vaccines – including through the COVAX Facility – to ensure rapid and equitable access for all countries. We will also be looking at how this crisis has been affecting our health systems, and people’s mental health.
While our most urgent task is to vaccinate people quickly and guard against new outbreaks, as we emerge from the crisis, our most important intergenerational responsibility is to protect the planet.
Despite reduced global activity, the atmospheric concentration of CO2 continued to increase in 2020. Currently, the world is not meeting the Paris Agreement target to keep this century’s global temperature rise below 2°C and pursue a limit of 1.5°C.
The climate crisis will not wait for the pandemic to cease. The recovery is an opportunity to build back better focusing on the environment, public health and people’s well-being. This means restructuring key sectors towards low emissions, boosting energy efficiency and renewable energy, and fostering ecosystem restoration.
The OECD is working to support countries achieve a green recovery, for example, through our new Green Recovery Database to track the environmental dimensions of recovery measures. OECD tax policy tools, such as carbon pricing, can also improve environmental outcomes, while raising government revenues.
This year it is important to conclude an international agreement on taxation issues in our digitalised economies. You will be discussing this today in the Parliamentary Group on Tax. An agreement among the 139 countries and jurisdictions would be an important step towards fairer taxation globally. It could also yield up to 100 USD billion per year in additional global corporate income tax.
The COVID-19 pandemic has brought so much pain, hardship and uncertainty, but it has also brought the possibility of a new beginning. It is time to build back better. For that, we need to act together, imagine together, dare together. Only by working together, can we harness the power of collective action and create a healthier, greener and fairer world.
You can count on the OECD to continue working with you, and for you, to shape the post-COVID-19 world.